5 Stocks Ready to Bounce Back

However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find such shares on the rebound, by examining one specific sector of the economy in search of companies with rising CAPS ratings.

Among the 352 stocks listed under "Consumer Goods" in the CAPS' screener, we've unearthed a handful with top five-star ratings. Our 135,000 CAPS investors are confident that these stocks will beat the market in the months ahead:

Sources: Motley Fool CAPS; Yahoo! Finance.

You'll find a broad range of companies in the Consumer Goods sector. Some of them you'd expect to see there, like Colgate and Pepsi, while others might not be so obvious, like Chinese hog farmer Zhongpin.

Some spring in its step
Yet when you're in a country that produces more than half of the world's pigs -- as China does -- you need a lot of feed. So it wouldn't be casting pearls before swine to take a closer look at AgFeed Industries, which makes the fodder that fattens them up.

While the U.S. meat-processing industry has been waylaid by volatile meat and poultry prices -- Pilgrim's Pride declared bankruptcy, while Tyson (NYSE:TSN) and Smithfield Foods (NYSE:SFD) are struggling financially -- we're talking about a country with a serious love affair for pork. If you've been leery about investing in Chinese companies before, you may be missing out on one of the best places to make money these days.

China has 450 million pigs, and AgFeed has a dominant position in feeding them. It's one of only a handful of feed companies that has received "green" certification, which allows it to negotiate contracts for corn and soybean meal at a discount to market prices.

That's an advantage that will put it in a competitively stronger position. Back in February, the price of corn futures in China was hitting a record $189 per ton, yet AgFeed was able to report that its corn prices remained steady throughout the first quarter. Little wonder that investors are thinking this stock is ready to pop, even though the value of its shares has been cut in half over the past year. CAPS member kab1952 figures you can be in hog heaven:

Chinese, like Americans, love to eat. [Their] meat of choice is the "other white meat," pork. AgFeed [supplies and owns] own hog farm operations. They have low debt & are very well [run]. If every person in China [ate] just a quarter of a hog a year, that would be 250,000 hogs. Hmmm …

At just 10 times earnings, and considering the growth opportunities in front of it, AgFeed looks cheap. Colgate-Palmolive, on the other hand, with a market multiple of around 19, looks much more expensive. Even during the March swoon, when things seemed at their worst, Colgate was sporting a premium to the market's valuation.

But there could be a good reason for that. It was one of the few consumer brands that was able to push through price increases last year and enjoy a bounce in sales, even when rivals such as Procter & Gamble couldn't. Now with many expecting an economic recovery to start by year's end, Colgate has those higher prices in place and could see its margins improve further.

CAPS member PaloAltanFool believes Colgate-Palmolive is a fairly solid investment that pays you to sit back and wait for other gains to come.

Solid company with a good foothold in a good stable market. Dividend is nice, [and] the fact that the stock movement is better than most competitors is nice.

Balance sheet isn't great, but meh, you can't get too picky in retail stocks.

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.